Walker pitches gas tax change to bolster road funds

Updated Oct. 14, 2014

Gov. Scott Walker is considering swapping out the state's gas tax for a sales tax that wouldn't raise fuel prices today but could provide more future money for state roads — at a greater cost to drivers.

The Republican governor made his comments in a visit with Milwaukee Journal Sentinel editors and reporters Tuesday, just three weeks out from one of the most competitive elections in his long career. Walker, a Republican, is locked in a tight race with Democrat Mary Burke, a former Trek Bicycle Corp. executive who served as state commerce secretary under Gov. Jim Doyle.

Walker said that creating a unique sales tax for gas might solve one of the key problems in paying for state roads and bridges — that the per gallon gas tax isn't expected to grow quickly enough to keep up with rising costs for state infrastructure. He said that he wouldn't seek to use the switch to gain more tax money right now and that he would make it part of an overall net cut in state taxes.

To replace the nearly 33-cent-per-gallon gas tax, Walker would need to create a sales tax on fuel beyond the current 5% state tax on other items. Otherwise, he would need to keep some part of the existing gas tax and then add the new fuel sales tax on top of that.

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The governor provided few details but said this approach would be better suited to a world in which the price of gas has risen while the number of gallons of gas purchased is flat.

"The gas tax itself — we're too dependent on primarily that source," Walker said of the state's main funding mechanism for its infrastructure. "Increasingly as cars and vehicles become more fuel efficient (and) the gallons of gas purchased go down, the gas tax collections go down, even though those vehicles put the same wear and tear if not more on the roads out there."

"As I understood it, I don't think it solves the problem," Burke said in a conference call with reporters. "It doesn't address the huge shortfall that we're facing in the transportation fund. In fact, it could present additional issues because the price of gas can fluctuate so dramatically it could leave a huge shift in the amount of revenue coming in and not having a predictable revenue source is a problem when you're funding long-term transportation projects."

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This week will be packed with news on the governor's campaign, with the Marquette University Law School releasing a poll on the race on Wednesday and the second of two debates between Walker and Burke scheduled for Friday. Burke will speak with the Journal Sentinel staff on Wednesday about the race.

On Monday, Walker floated the idea of the gas tax shift to the editorial board of the Wisconsin State Journal.

Collections from the gas tax have been stagnant in recent years as people drive less and vehicles become more fuel efficient. Relying on sales taxes would make revenues more volatile because gas prices can fluctuate widely at the pump, but the state could impose a tax floor and ceiling to manage that.

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The idea comes after a special commission last year determined Wisconsin needs an additional $6.8 billion for transportation over the next decade. Legislative leaders immediately rejected the panel's suggestions to raise gas taxes and registration fees and create a new mileage-based fee.

The state's road builders took a cautious approach to Walker's trial proposal.

On the issue of abortion, Walker noted that he helped write a recent ad in which he

said he was aiming to protect all citizens in the state by backing legislation that required women to have an ultrasound before an abortion. Walker said that fetuses are citizens, saying that he felt women whose pregnancies end because of an accident would receive sympathy cards for that loss rather than simply a get-well card.

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Walker didn't directly answer questions about whether he would sign new legislation restricting abortion but said he is inclined to favor new regulations.

"I think it's a human life so it obviously raises some concerns for me," Walker said of the procedure, adding later, "I'm pro-life, so that part shouldn't shock anybody. It doesn't shock anybody, the legislation I've signed in the past."

The governor didn't say whether he would sign so-called right-to-work legislation that would letworkers avoid paying union dues if they choose not to belong to a union. He did say for the first time that he has told Republican lawmakers not to send him that legislation, saying it would just "bring the whole firestorm back," a reference to the labor demonstrations over his 2011 legislation repealing most union bargaining for most public employees.

"Those aren't the sorts of debates that are helpful for us to take the next step forward. It's about the tenor and the tone of the Legislature and what it means to the state as a whole," Walker said.

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Meanwhile, Burke on Tuesday debuted some of her closing arguments in the race, seeking to frame the choice voters will face in the Nov. 4 election.

"The governor has had four years and frankly his approach isn't working," Burke said during the conference call with reporters.

She sought to separate her policy choices from the governor's in several areas, including jobs, taxes, education and abortion.

Burke vowed to "reduce taxes on working and middle-class voters" and said in a follow-up question that she would not raise taxes on anyone, including the wealthy.

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She promised to make higher education more affordable and said that Walker's two-year tuition freeze at University of Wisconsin campuses "doesn't go far enough."

"Right now, 41,000 students are on a wait list for financial aid, and Governor Walker has failed to fully address this core pocketbook concern for Wisconsin's middle class," Burke said

She said she would "protect individual freedoms" on abortion, marriage equality and voting rights but didn't give specifics.

She also took Walker to task for a projected $1.8 billion shortfall in the next state budget, claiming the governor's "fiscal irresponsibility has weakened the state." Walker said Tuesday that he had solved a $3 billion shortfall projected for his first budget in 2011 by cutting state aid to schools and local government and then allowing them to cut employee benefits and take-home pay to offset those cuts.

New numbers from the state Department of Revenue Tuesday showed that from July to September of this year, state tax collections were $2.75 billion, down 2.3% over last year. That's far below the level of 3.5% growth that was originally forecast for the current fiscal year and is of further concern for the state budget.

The revenue numbers are likely overly pessimistic, however, because last spring Walker ordered the state to withhold less tax money from workers' wages now so that the state wouldn't have to refund as much to workers next spring after they file their tax returns.

Meet the Candidates

The Journal Sentinel Editorial Board is meeting this week with the candidates for state attorney general and governor.